The Sky Is Falling!
The sky is falling! The sky is falling! These are the ridiculous proclamations of the MSM because the yield curve has turned negative. That’s where long-term bond rates (returns on investment) are lower than short-term rates (returns).
The yield on the Treasury’s benchmark 10-year note fell to 1.59% Wednesday afternoon. Earlier in the day it had briefly traded below the return on the Treasury’s 2-year note, something investors haven’t seen since June 2007. That spooked the equity markets, with the S&P 500 Index down by more than 3%.
Financial pundits in the MSM led by CNN immediately called for a US recession. They pointed to the fact that China’s industrial production grew at the slowest rate in 17 years in July while Germany’s economic output actually shrank slightly in the second quarter.
Let’s look at the bigger picture from the 30,000 foot level. One has to start with the idea that, in economics, there is something known as supply and demand. This idea is economics 101 and has been intentionally overlooked by the MSM financial “experts.”
As many people know at this point in time, ICE conducted a round-up of illegal aliens at Mississippi food processing plants last week. In total, some 700 such individuals were apprehended.
